WASHINGTON {AP} Labor unions have spent millions of dollars of workers' dues on election-year ads and get-out-the-vote drives while reporting no taxable political expenses to the IRS, a review of union and government documents shows.

IRS officials told The Associated Press that it appeared the unions were obliged to disclose at least some of the activities on their tax forms. Failure to report can result in back taxes and fines if the IRS concludes the spending failed to follow rules for tax-exempt organizations like unions.

Tom Miller, manager of the IRS section that writes the rules for tax-exempt groups, commented, "If you look at some of the things that have been out there publicly, some of the (union) activities fall on that side of the line."

"Yes, it could trigger an audit. It certainly could," said Jack Reilly, a longtime IRS official who has written manuals for tax-exempt organizations.

The officials cautioned they could not comment on specific unions and that auditors could not make a determination unless they reviewed each expenditure and its underlying documentation.

The AP described to IRS officials the political expenditures detailed in the documents without identifying any specific union involved.

One key, the officials said, was whether the documents show the intent of unions was to help candidates or specific political parties.

Labor officials  including those at the AFL-CIO, which spent $35 million on activities during the 1996 election campaign but reported no political expenses to the IRS  said they believe they have properly filled out their tax forms.

"We feel perfectly comfortable," said John Hiatt, general counsel for the AFL-CIO. "If we're audited, we'll face the music and show them what we've done."

Some of organized labor's political foes did report political spending. For instance, the U.S. Chamber of Commerce reported nearly $14 million in political and lobbying expenses in 1996 and the National Association of Manufacturers reported $5.2 million.

However, IRS officials said business associations also are required to separate their political spending from lobbying expenditures, something these groups did not do.

AP gathered the tax forms of several major unions dating to 1996. None of the tax forms showed political expenses.

AP also reviewed thousands of pages of internal union documents gathered by the Federal Election Commission during a four-year investigation of union activities. That inquiry ultimately ended without any action against the unions.

The documents, which otherwise would not be public, detail how tens of millions of dollars in workers' dues were spent on activities designed to defeat Republicans or elect labor-friendly Democrats in 1996.

The unions have continued their political activities in the elections since 1996, but the same richly detailed documents for subsequent years are not public.

For instance, a document laying out 1996 Democratic activities in North Carolina to be approved and partly funded by unions stated a clear mission: "We seek to: re-elect President Bill Clinton, re-elect Gov. Jim Hunt, elect Harvey Gantt to the Senate ... win back at least two seats if not the majority in our state's congressional delegation." Clinton, Hunt and Gantt are all Democrats.

The AFL-CIO conducted a Washington seminar only for Democratic congressional candidates  about 50 attended  and armed them with materials to help them better communicate with union and women voters.

And several unions pooled their money for a $2.7 million program called the "96 Project." Internal project documents said the goal was to influence the national debate over congressional Republicans' "Contract With America" and to "hold individual members of Congress accountable" for their support of that agenda. In fall 1996, the project distributed voter materials and organized get-out-the-vote efforts.

The unions also ran millions of dollars of so-called issue ads in congressional districts where they hoped to defeat Republicans.

The IRS' Miller said documents indicating that the unions' intent was to help Democrats win suggest those expenses should have been disclosed to the IRS.

"If I was an examiner and have documents showing the purpose is to elect Democratic candidates, and they say it's not partisan, it shifts the burden on them" he said.

Union leaders said they don't believe their activities met the IRS requirement for reporting political expenditures.

"It's a common practice by us and every other organization I know of, and there's no legal authority to the contrary. You are really grasping at straws," said Laurence Gold, the AFL-CIO's associate general counsel.

The Internal Revenue Code requires unions to list any direct or indirect expense "intended to influence the selection, nomination, election or appointment of anyone to a federal, state or local public office."

Gold said one activity that unions considered possibly political  voter guide ads  was paid for out of a segregated fund that did not require reporting to the IRS. Everything else was not reportable, he said, in part because many activities were aimed at union members. The ads portrayed Democrats favorably and Republicans negatively.

Union officials said the activities aimed at the public, like get-out-the-vote drives and issue advertising, were nonpartisan or legislative in nature. But the unions' own filings in the FEC case repeatedly called them "political."

Gold, the AFL-CIO lawyer, dismissed those representations as irrelevant.

"The word 'political' is general, anything having to do with the general political sphere," Gold said. "It's used many times not to mean electoral."

Tax experts said the union documents likely would raise questions among IRS auditors. But they also faulted the agency for not speaking clearly enough on what political activities may be reportable for tax purposes.

"When the guidance doesn't keep up with the activity, it provides an opportunity for aggressive interpretation of the rules," said Marcus Owens, the former head of the IRS tax-exempt division.